The Controversy Over Hospital Charges to the Uninsured - No Villains, No Heroes

Abstract

Beginning in March 2003, the Wall Street Journal ran a series of articles focusing on hospitals that charge uninsured patients inflated hospital rates and aggressively hound them to make collections. The articles emphasized the collections methods used by some hospitals, including even "body attachments," where the patient debtors were jailed until they could pay bail.

During the summer of 2004, uninsured patients commenced a wave of class action lawsuits, alleging that hospitals charged them higher rates than the hospitals accepted from insurance plans for comparable services. The lawsuits also alleged that the hospitals failed to advise the uninsured of available options for charity care, and aggressively pursued the patients to make collection on the exorbitant bills. Thus began an examination of this anomaly: the only segment of society that pays undiscounted charges for hospital care is the uninsured. This Article will examine how this situation came about and what has been done to address the issue.

Most hospitals have adopted indigent billing and collections practices so that the uninsured will not be charged the highest rates the hospitals bill to all payors. However, the Article points out that the same system of excessive charges for the uninsured can occur with regard to other types of healthcare providers as well. Relief from charges should be broadened to include the full range of providers who charge the uninsured at the uppermost limit of the providers' rates.

The problems that the uninsured face have not changed much. Hospital bills, even at prevailing managed care rates, will probably continue to be beyond the means of the working poor or the unemployed to pay. This population will continue to be subject to collections with only the most aggressive collections tactics being abandoned.

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